Tag: FSF

Scaling-up Climate Finance from 2013

16:30-18:00 - Miraflores (Sheraton)

How to ensure sufficient and scalable longterm public climate finance starting in 2013, after the end of FSF. CAN will discuss the need for new and additional budget contributions and assess options for mobilizing supplementary sources of innovative public finance, consistent with CBDR.

We are starting the crucial final week. Ministers are being briefed, crucial new texts are being minutely analyzed and insect bites are spreading. With so many difficult, complex and itchy matters competing for attention, it might be easy to overlook one fact. We have only two years to get climate finance flowing at scale before fast start finance expires in 2013.  But there’s good news: a variety of innovative sources of climate finance are right at our fingertips.
This week, Parties should create a robust process to discuss sources of long-term finance, with a clear work plan and outcomes that can deliver concrete decisions by COP 17. These steps will address where the financing will come from, and acknowledge that meeting mitigation and adaptation objectives  means scaling up finance substantially over the long term
The new LCA text usefully calls for a look at needs and options for mobilizing long term finance. But in the absence of a work plan and outputs, negotiators will face another year of wrangling over how to move forward.
Sources of financing is a political issue, not a technical one, and it must be discussed in the LCA, not pushed off into the SBI or a body focused on designing a new fund.
The issue was held in abeyance this past year while the UN Secretary General’s Advisory Group on Climate Finance (AGF) did its work. The AGF has now released the findings of 9 months of study. While ECO was disappointed that private finance and carbon markets are spotlighted, and multilateral development banks are inappropriately considered sources instead of channels of finance, this constitutes an impressive body of work including workstream papers that can serve as a useful starting point for the coming focus on ways to mobilize public finance.
One source is government budgets from developed countries.  This will continue to be an important source of international climate finance, and a scale for assessed contributions will be an important output of the process.
But to scale up public finance to the necessary scale, rising rapidly from fast-start levels, other innovative sources will be required. Mechanisms to address emissions from international shipping and aviation fit that bill.
The AGF has endorsed a mechanism to solve the equity question under the principle of common but differentiated responsibilities raised about this mechanism. The AGF proposal involves using a rebate to ensure that developing countries are not subject to any net incidence or burden from global measures to address emissions in these sectors.
In the shipping sector this rebate would be based on the share of global imports attributed to each country. Other options are discussed for the aviation sector. Developing countries will be entitled to the rebate, while the share of revenue attributed to developed countries would be administered under the UNFCCC and be used for adaptation and mitigation actions in developing countries.
Text introduced by Chile should supplement the Chair’s LCA text on aviation and maritime transport.  However, a process for committing to public finance options must go beyond the AGF report to include new submissions, workshops and a clear workplan to get to decisions by South Africa on specific sources.
If we can break the longstanding deadlock in addressing emissions in this crucial and grow, negotiators and Ministers can claim an important success here in Cancun. And all those mosquito bites can be a badge of honor.

Delegates arrive by plane and eat food that’s been shipped by boat – international transport has been part of the COP since the beginning.  And while there are 100% biodiesel buses bringing delegates from the Messe to the Moon Palace, we are a long way (whether by plane or boat) from having international transport running on clean fuel.  
Even if the weak voluntary measures proposed by the International Civil Aviation Organization (ICAO) are implemented, emissions from transport, if kept unregulated, would amount to 30% of the annual global emissions budget by 2050 to be compatible with a 2° C objective. In the 1.5° C scenario the figure is even worse, it’s above 60%!
But there is some good news too.  There are now ways for global regulation of emissions from international transport to cause no net incidence on developing countries. This guarantees consistency with the principle of common but differentiated responsibilities without affecting economic efficiency – something that has been blocking a decision in this arena.
Even better, there are many options available to generate climate finance, some of which could yield upwards of $10 billion USD per year, while also generating funds for technology innovation in the international transport sectors.  That’s another point that has been blocking progress.  And better yet, you guessed it, some of these options can also achieve significant emissions reductions.
If given a clear signal at this COP, regulations under the International Maritime Organization (IMO) could be operationalized as early as 2013. Remember, the closure of the fast-start financing period will be upon us in two short years.  A decision here at Cancun would allow FSF, much of it actually non-additional, to be replaced with real, new and additional finance.  That would be something for delegates to be proud of as they taxi down the runway leaving the Cancun International Airport for well-deserved time off at the end of the year.   
As the High-Level Advisory Group on Climate Change Financing (AGF) points out, no single source is going to reach the promised $100 billion USD level by 2020.  ECO therefore reminds developed countries that substantial public financing from you will also be required.  And it is easy to see that financing from international transport should be part of any package.
Sending a clear signal to IMO and ICAO at COP 16 will not only help prevent a finance gap but also take a big step to ensure environmental consistency and climate stabilization.